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iShares Mortgage Real Estate Capped Message Board

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  • retaoba retaoba Jun 4, 2012 7:19 PM Flag

    Pros and Cons owning REM

    Not so much into banking stocks, not sure where you got that info from - this ETF is pretty much an REIT ETF as you can see here: http://us.ishares.com/product_info/fund/holdings/REM.htm

    Beware that 20% of fund is NLY and 20% is in AGNC, about 40% or so of the rest is in 10 of the other top 12 holdings. the other 20% of holding are made up of 15 or so other (smaller) REITS.

    Pretty good diversification withing this sector. Much better way to play this sector than just investing in 1-4 stocks IMHO.
    Keep in mind it is a sector play. Rates going up will hurt it. Bad news from NLY or AGNC will (obviously) hurt it. Other than that should be a relatively safe place for money - until rates start back up - then be careful.
    Buy for the divvy, as stated - not for appreciation. Seems like a good buy under 14, if you can get it under 13.5 - even better - again it's all about the yield!

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    • Retaoba, thank you for your posts. Are you still long and what is your latest views?

      Mant thanks in advance.

      • 1 Reply to learningisdkey
      • Still long, got a while back - not the bottom low but better than current prices.

        Would I buy now? I think I would sell puts on this and try to get it under $14, or even better under $13.5 if I wanted more - either way (puts or owning it) you get a steady income stream. See if you can get $0.30 for the Oct $14's....

        If rates start to go up, watch it carefully. But it appears the Fed wants you to buy dividend producing equities until at least the end of 2014. Maybe longer?

        I might buy more on a pullback not related to interest rates.

 
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